Diving duck observed by narrow promontory (7)
I believe the answer is:
sawbill
'diving duck' is the definition.
(type of duck)
'observed by narrow promontory' is the wordplay.
'observed' becomes 'saw' (seen).
'by' is a charade indicator (letters next to each other).
'narrow promontory' becomes 'bill' (I've seen this before).
'saw'+'bill'='SAWBILL'
(Other definitions for sawbill that I've seen before include "diver" , "Flyer" .)